5 Major Money Mistakes in my Life

Looking back at my last 20 years of my investing career, these are some of my big mistakes that I had done

1) Too much focus on speculation 

In early days of my investing career, I was focused on trading and making money. This was in 2003-05 period when the stock market was in uptrend. I missed opportunities to invest in great companies in 2003 like HDFC Bank at less than Rs 50 and Titan at less than Rs 10 (adjusted for splits and bonus) but was only trading for small profits. I realized this mistake in 2006 and started to invest rather than trade.

2) Taking Leverage in Investing

Towards middle of 2007, I was confident on my investing skills and my success in 2006 and 2007 that I started to take personal loans and invest in stock markets. I also pledged my shares and got some money to invest. When the Global Financial crisis happened in 2008, my portfolio sunk 70% and my broker sold my holdings to close my loan. This was just a few weeks after Lehman Brothers collapse in 2008. This was a worst time to square of my holdings when the markets were at an all time low. I was holding Maruti & Crisil which got sold out. Maruti which was sold at Rs 500 in 2008 had hit a high of Rs 9000 (18 times growth) since then. Crisil which was sold at Rs 150 levels had hit a high of Rs 2400 (16 times up) since then. If I did not take leverage I could have been holding them or atleast sold them much higher.

3) Taking Tips from others instead of doing my research

In 2007, the markets were booming and there was excitement to make quick money. I came across a tip that a shares of a company called WS Insulators can double in 3 months. The price had moved up from Rs 60 to Rs 120 levels in the previous 6 months. I blindly invested bought 1000 shares without any research at a high. Later on, I realized that the business was not very strong and the company was not rewarding the share holders. I exited the business at Rs 20 levels after a few years.

4) Not betting big on winning ideas

In 2008-09 markets did present an opportunity to buy great businesses at bargain prices. I did my own research and bought TTK Prestige at Rs 300 levels. The big mistake was that I did not invest a significant portion of my capital but rather less than 100 shares. It was less than 1% of my portfolio value. The stock was up 15x after a few years and I realized that missed on a great opportunity

5) Not having a mentor early in my Life

This probably is the costliest mistake which I made. When things are going well we may not realize the importance of having mentors. It is during the times of crisis that a value of a mentor will be realized. I realized this after 2008 crisis. Also choosing your mentors with right values which are aligned to you is important. Having mentors in different areas also helps. You must have one for Business or Career, Money, Relationship, Health or any specific area that you want to grow.

Whatever humans have learned had to be learned as a consequence only of trial and error experience. Humans have learned only through mistakes.

~ R. Buckminster Fuller

Mistakes are part of life. The key is to learn from mistakes and not repeat them.

It is much wiser to learn from mistakes of others.

What are the money mistakes you have made?

Can you share them here so everyone can learn here